Appeal of Fees For Intervention (FFI's) - FFI withdrawn due to financial circumstances of the recipient

R (HSE) v All  Saints Church of England School

Readers of this bulletin who are involved in health and safety issues will be all too aware of the Fee For Intervention (FFI) system whereby the Health and Safety Executive (HSE) invoice an organisation for their regulatory involvement and/or initial investigation of a particular incident. What is less well publicised are the mechanisms which are in place to challenge the basis of FFIs. A formal appeal process is written into the FFI system, whereby the relevant tribunal for such an appeal is the Employment Tribunal. For a number of reasons, this is a system which is not well utilised by institutional defendants to FFIs and/or regulatory notices from the HSE.

What is less well known is the system of informal representations to the HSE; a system short of a formal appeal and, in many senses, a potentially more cost effective, halfway house, as it were, in the right case. Dolmans has recently achieved some success in relation to that latter route on behalf of a Board of Governors of a former Church of England School located in the Dorset area arising out of an incident at the school in the summer vacation period 2017.

We received instructions to represent the Board of Governors of the former All Saints Church of England School in Dorset, via the legal expenses insurers of the Board, in summer 2018. This arose out of ongoing investigations by the HSE in relation to an incident at the school over the summer vacation period 2017, leading to serious injuries to a contractor working at the school.

The background to that incident was complex; the Board of Governors, at that time, were responsible for the day to day running of the school, however, all capital expenditure (aside from minor works, specifically and financially defined) was authorised and overseen by the diocese responsible for the funding of the school and who owned the buildings from which the school operated. In that regard, the diocese operated through its appointed architect, who was engaged by the diocese direct and separate from any involvement by the school. As outlined overleaf, the diocesan architect had responsibility for drafting the scope of works, engaging contractors and running any necessary tender process to select contractors for the works.

In early 2017, it was resolved by the diocese (in conjunction with its architect) that certain building works would take place on site in relation to an ongoing window replacement process at the school. Due to the extent of these works, it was resolved that they should take place during the school summer vacation period in 2017.

The scope of works was drawn up by the architect retained by the diocese, who liaised with relevant contractors as to the provision of the works themselves. The school were peripherally involved in this process, but, only inasmuch as access to the site would be required during a school summer vacation period when there would be no staff on site on a daily basis (and, therefore, arrangements for access would be required).

Unfortunately, during the course of the works, a contractor ventured onto an unprotected fragile roof and fell through the same, sustaining injury in the process. Understandably, given this incident, HSE were involved and began investigating the incident, and the involvement of the parties concerned. Shortly after the incident in July 2017, the school itself was placed into special measures, consequent upon a very significant budgetary deficit within the school. Indeed, the Board of Governors at the school in place at the time of the contractual works resigned following the imposition of special measures and we were required to liaise with an entirely new Board of Governors, appointed following the imposition of special measures, in relation to the incident. 

It was necessary, against that background, to undertake extensive investigations into the incident and the background to the same and, in that regard, we were significantly assisted by the school’s former business manager, with whom we liaised extensively, together with the Chair of the new Board of Governors at the school who provided detailed background on the school’s difficult financial position, together with the interrelationship between the school and the diocese in relation to the sourcing and control of contractual works at the school. Critical to the latter was the understanding of the role of the diocesan architect who, as above, controlled the works on behalf of the diocese which, in effect, received the benefit of the same as the owner of the site and buildings thereon. 

This latter issue was extremely important in the context of the relevant CDM Regulations in regard to the incident in question; investigation of the same being one of the main focus points for the HSE in regard to the incident as a whole. Understandably, the HSE were concerned to identify, pursuant to the CDM Regulations, who the ‘client’ organisation was for the purpose of considering duties and potential breaches of those Regulations.  

On the basis that the HSE took the view that the Board of Governors was the client for CDM purposes, the HSE issued the Board of Governors with a series of Fees For Intervention for their ongoing involvement in this matter, the first of which arrived well before our involvement from late summer 2018 onwards (and, therefore, by which stage, the usual period for an ordinary appeal had expired by that point). As readers will be aware, such FFIs can (and, indeed, to a large extent are designed to) transfer the liability for the incident and investigation of the same from the tax payer (from ordinary funding of HSE) to the ‘guilty party’ who are required to pay for the involvement of the HSE, usually from the point of service of the first FFI until any ultimate prosecution ensues (the latter then generating a whole new raft of costs, usually including legal costs for outside solicitor agents retained by the HSE). 

Thus, in summary, at the point of our initial involvement in this matter, we had inherited a situation (as  it  were) where the initial period for appeal of the FFI situation had expired and, moreover, the financial position of the organisation concerned was highly precarious, with, once again, the school in special measures consequent upon a very significant budgetary deficit having been identified. Additionally, there were legal reasons to suspect that the Board of Governors were not the proper recipients of FFIs in the first place, given their role (see above) and given the roles of the diocesan architect and the diocese itself, both of which, we had been informed, had also received (apportioned) Fees For Intervention arising out of the same incident/investigation.

Accordingly, having established the facts of the situation in some detail, we resolved to write to the HSE Fee For Intervention Team at the HSE offices in Bootle, Liverpool, and make representations as to the FFIs levied in this matter. Our submissions in this regard covered a number of aspects of the case which can be summarised as follows:

  • It was acknowledged that the approach as to FFIs was technically ‘late’ but, at the same time, given the parlous financial position which the Board of Governors and the school found itself in, clearly, it was preferable that these submissions were entertained by the HSE, rather than ‘force’ the Board of Governors to engage yet further cost in instigating a formal appeal, particularly given the cost in management time which would be engaged by such a process in the context of the somewhat existential struggle faced by the school in other respects. 

  • Following on from the above, the reality was that the school was in no position to pay the FFI invoices which had been levied against it. In that regard, detailed financial information was provided to the HSE as to the state of affairs which the school found itself in. In essence, an organisation in deficit to the extent of this school, moreover a public sector organisation, ought not to be paying FFI fees to the HSE, another public sector organisation.

  • If necessary, a formal appeal would be launched as regards to the FFIs outstanding in this matter, but, we submitted, given the above and the below, it clearly made sense for the HSE to at least forego enforcement of these FFIs pending a decision/conclusion as to wider prosecution of all parties involved (which had not yet been reached).

  • Generally, FFIs should not be levied against the school, given the role of the diocese and the diocesan architect as client (as per the CDM Regulations) and controller of the works/client representative on site (a site, which, from the school’s perspective, was closed and unoccupied at the material time, and which, in our submission, was highly material to the determination of ‘client’ pursuant to the CDM Regulations); in short, they were the parties responsible for the works and, therefore, if there were perceived deficiencies in the organisation of the said works, they should answer for the same, rather than the Board of Governors who had no involvement in the organisation of the works, management of the same on a day to day basis or having anyone on site at the material time. 

Having made these submissions in some detail, we awaited the outcome of the same, together with a decision as to prosecution from the HSE.

Helpfully, we received an intermediate decision from the HSE to the effect that they would not expect us, given the financial situation of the school, to launch a formal appeal with regard to the FFIs. Moreover, enforcement of the FFIs would not be pursued pending a decision as to the wider principle of the same by the HSE FFI Team in Bootle. Thus, we had immediately secured a significant saving in further legal costs in obviating the need for a formal FFI appeal. 

At the present time, a decision as to prosecution remains outstanding. However, we have recently received confirmation from the HSE that our appeal of the FFIs issued against the Board of Governors has been upheld in full on the basis that the HSE (sensibly in our view) reached the view that the financial position of the Board of Governors was such that it would be inappropriate for FFIs to be levied against them. In that context, it is important to understand and emphasise that the decision by the HSE is not an adjudication on our submissions as to the relationship between the various parties (see above), but, rather, a sensible and pragmatic decision reached by reference to the financial situation of the school (which, ultimately, led to the school itself being transferred/converted to Academy status in an effort to ‘rescue’ it from the financial situation it found itself in). The situation as to prosecution of some, or all, of the parties involved in the incident remains unresolved and, no doubt, that will become clear in due course.

Clearly, however, and at the risk of stating the obvious, the ability of the Board of Governors to pay a regulatory fine mirrors its position as to FFI liability.

Comment

This case/situation illustrates the need for detailed investigation of health and safety matters, not only in terms of the question of a potential prosecution, but also from the perspective of potential collateral financial penalties, such as Fees For Intervention. Often, FFIs are (rightly) seen by organisations as the appropriate ‘price’ for regulation by the HSE when they have experienced an incident. However, it is not universally the case that FFIs are appropriate in all circumstances, as this case demonstrates.

It is important that potential defendants seek appropriate legal advice as to regulatory intervention, not only with regard to any possible future prosecution, but also with regard to the possibility that existing elements of the relationship with the Regulator can be explored further and potentially resolved in favour of the regulated party.

Clearly, those cases where FFIs can be successfully challenged will be in the minority. The FFI system is predicated on the understandable basis that the financial burden for an incident or regulatory situation should be transferred to the party responsible for creating it in the first place (“the guilty party”), rather than being funded from general taxation which, ordinarily, forms the basis of funding of the HSE. However, in appropriate instances, a sensible and pragmatic approach can be obtained from the HSE, provided there is an appropriate and substantive reason to pursue a differing approach from the norm. 

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